Congress has some unfinished business on alternative energy policy, which may provide unusual legislative opportunities in an election year. While tax credits for wind and solar power received long-term extensions in the year-end omnibus legislation enacted at the end of 2015, other types of alternative energy were left out — reports have suggested unintentionally — spurring some in Congress to seek a remedy in 2016. Additionally, the Department of the Treasury (“Treasury”) and the Internal Revenue Service (IRS) initiated a rulemaking process to further define and clarify the types of property qualifying for the investment tax credit (ITC) under section 48 of the Tax Code. These developments, along with ongoing congressional interest in comprehensive energy policy legislation, could make 2016 a pivotal year for stakeholders in the alternative energy industry.

Last spring, the U.S. Fish and Wildlife Service (the “Service”) published a final rule to list the northern long-eared bat (the “Bat”) as a threatened species and an interim 4(d) rule under the Endangered Species Act (the “Act” or “ESA”) (16 U.S.C. §1531 et seq.).

The interim 4(d) rule reflected an attempt by the Service to accommodate both conservation needs and industry group interests; however, it was widely believed that the listing of the Bat as a threatened species would impose a significant burden on wind, energy, and other energy infrastructure projects carried out within range of the Bat, as defined by the Service.

The Commodity Futures Trading Commission (“CFTC,” or the “Commission”) has begun a process to assess the de minimis exception to the Commodity Exchange Act’s swap dealer definition in connection with the end of the definition’s phase-in period in December 2017. At that time the swap dealer de minimis threshold will automatically fall from $8 billion to $3 billion, unless the Commission specifies a different de minimis threshold.

The Washington State Department of Commerce is holding its Virtual Bidder’s Conference on January 12, 2016 at the Seattle office of K&L Gates to provide information to applicants about applying for Clean Energy Fund 2 grants. As mentioned in an earlier blog post, the Clean Energy Fund provides grants to projects that support the development, demonstration and deployment of clean energy technologies. The CleanTech Alliance has been hosting a series of public meetings across Washington State to provide a platform for the Washington Department of Commerce to provide information to and answer questions from applicants.

Expedited permitting and environmental review for complex infrastructure projects may soon be a reality. Buried at the end of its most recent transportation reauthorization package (the “FAST Act” or “Act”) is a significant new initiative intended to fundamentally change the way that federal agencies evaluate environmental impacts from, and issue permits for, construction of large infrastructure projects. [1]

National Environmental Policy Act (“NEPA”) review and environmental permitting for complex infrastructure projects can be costly and protracted. For instance, a U.S. Government Accountability Office Report stated that the average completion time for an Environmental Impact Statement (“EIS”) in 2012 was 4.6 years. [2] Between 2003 and 2012, the Department of Energy paid contractors an average fee of $6.6 million, and as much as $85 million, to prepare EISs. [3] The cost to prepare an EIS is often borne by project sponsors. Some transportation and water resources projects currently benefit from expedited permitting and environmental review procedures, [4] but the FAST Act is the first time that Congress has attempted to coordinate NEPA review across federal agencies and industry sectors.

The Oregon Public Utilities Commission (the “OPUC” or “Commission”) opened Docket No. UM 1751 in compliance with House Bill 2193. As discussed in an earlier blog post, HB 2193 requires electric companies to procure qualifying energy storage systems by January 1, 2020, subject to authorization by the OPUC. Section 3(1) of the legislation requires the Commission to adopt guidelines no later than January 1, 2017 for an electric company to use when submitting a proposal for one or more energy projects by January 1, 2018.

K&L Gates partner Bill Holmes will present at the Renewable Energy Law 2016 CLE conference on February 9-10, 2016 in Austin, Texas, hosted by the University of Texas School of Law and the Oil, Gas and Energy Resources Law Section of the State Bar of Texas.

Mr. Holmes will co-moderate the session “Trends in Buying and Selling Renewable Energy: Commercial, Industrial and Wholesale Transactions,” in which he and other presenters will discuss the role of long-term PPAs and hedges in the procurement of renewables by utilities as well as commercial and industrial demand for renewable energy from offsite and on-site sources.

On December 28, 2015, the Federal Energy Regulatory Commission (“FERC”) issued an order pursuant to Section 206 of the Federal Power Act (“FPA”)[1] finding that the ISO New England Inc.’s Transmission, Markets and Service Tariff (“Tariff”) is unjust, unreasonable, and unduly discriminatory or preferential. FERC’s determination was based on a finding that the Tariff lacks formula rate protocols and, by extension, lacks adequate transparency and challenge procedures with regard to the formula rates used by the ISO New England Participating Transmission Owners (“PTOs”).[2] FERC also found that the formula rates themselves may be unjust and unreasonable or otherwise unlawful because the formula rates appear to lack sufficient detail to accurately determine how certain costs are derived and recovered.

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